A few weeks ago at the San Diego Comic-Con, we sat down with DC President and Publisher Paul Levitz for our annual talk about the state of the comic business and DC's place in it.In Part One, we talk about the current state of the market and its prospects, and the potential for Watchmen to bring new consumers to comics and graphic novels. In Part Two, we talk about economic effects on comic and graphic novel distribution channels, DC’s relationship with mass merchants, its approach to event titles, and its MMORG. In Part Three, we talk about the status of DC’s relationship with Flex, the Zuda Webcomic site, film plans and Hollywood’s current interest in comics and superheroes.

What’s your read on the market for comics and graphic novels this year?

We’re at a really interesting moment. We have a couple things going on that are going to have a fascinating effect. Everybody has argued for years that Watchmen was the perfect gateway drug in our business—you get that as your first purchase and significant percentages of people come back as further purchasers.

We’re printing and shipping so many Watchmen at this point in the spike following the trailer, on top of the rise that we had prior to the trailer as the buzz was building, that I think there’s a reasonable chance that we’ll have a 100,000 plus new graphic novel readers in this country this year, which would be the largest stair step of growth in bodies reading the material in any single year that we’ve had in a long time. If that happens it’s going to be a very good time for everybody. [Editor's note: This statement was made as DC had just ordered an additional 200,000 copies of Watchmen in response to demand stimulated by the movie trailer; that number has now grown to 900,000.]

God knows what specific things they’ll fall in love with next. Retailers always have had paths they’ve traditionally lead people on from Watchmen-- V for Vendetta in one direction, Sandman in another, non-DC stuff I’m sure in many other cases—but I think there’s a very good chance that the pool just grew a lot larger in about two minutes flat. If the guidance we’re getting from the retail community is correct, we’re just at the beginning of this phenomenon going on and the numbers are going to be really amazing through the year.

Some people think that Watchmen is a risky movie for presenting comics to a broad audience because it’s so dark. What are your thoughts on that?

The great successes are always the things that you can’t prove in advance will work or will not work. You get a Superman because it’s a departure from what was there before.There were ancestors of him in the creative process, but it represented a leap forward. And the same reason that my predecessors were nervous about putting him on the cover of every issue of Action Comics for the first few until they got the sales figures in, were the things that in part created the potential for him to be the breakaway at this time.I don’t think there’s a lot of mid-ground for Watchmen. I think it will either be very successful or it will be a passionate cult favorite. Everything we’re seeing so far indicates to me that we have a good shot at it being a breakaway.

You said there’s a potential for 100,000 new customers for graphic novels this year alone. Can you carry that out and talk about what the overall impact of the movie might be?

It’s a pretty dubious mathematical exercise. But if you assume that the new people that we bring in behave like the kinds of people we’ve had as casual graphic novel readers for the last batch of years, you could easily be talking about $30-40 million more of annual sales coming into the graphic novel business in one stair step.

That’s a great look forward and one of the big things that starting to impact sales already this year. Aside from Watchmen, what’s your view of the condition of the market for comics and graphic novels?

One piece that certainly drives it are the challenges to the U.S. economy overall. We’ve not lived through a sustained recession since the comic book habit got as expensive as it is today. In the old days when comics were the cheapest form of entertainment and a casual read, it tended to benefit in a recession. I worry that some number of our core consumers who are spending so much on our world will be economically pressed if this recessionary behavior continues.

I think that’s one of the things that retail community is concerned about and is watching very carefully.

Are you seeing that yet?

It’s always hard to judge the difference between a retailer being cautious because he thinks the economy tells him he should and a retailer being cautious because he isn’t happy with something you offered him, or being cautious on your stuff because somebody else has something out that he’s more interested in. You don’t really get an objective measure of which of those things is going on, but any anecdotal evidence just walking down any street tells you that people in America are concerned about the economy. Traditionally the year after a presidential election is a more dangerous year for the economy than the year before, so there are some wolves in the woods.

Graphic novels have never been this big a share of the business during a recession, so that’s a difference—do you expect a difference in response to the economy on spending in those two categories?

I think the categories fundamentally behave differently. I’m not sure we know enough to predict the difference between the two, but if there isn’t a difference it’ll only be because they coincidentally behaved the same way not because the fundamentals work the same way.